China is just not solely putting in extra robots, however constructing extra of them. That thesis is driving Morgan Stanley’s view that China will continue to grow as a worldwide robotics chief, giving two Chinese language firms an edge, funding analysts mentioned in a Sept. 30 report shared with media within the final week. The evaluation got here on the heels of the Worldwide Federation of Robotics’ annual report launched in late September that confirmed that in 2024, China not solely put in a report excessive 295,000 industrial robots, however home suppliers outsold overseas ones for the primary time. “As robotics in China is opening up new markets, there isn’t any indication that robotic demand in China will lower,” the report mentioned. “There’s nonetheless loads of potential in Chinese language manufacturing for 10% development on common annually till 2028.” International robotic installations are forecast to develop by 6% this yr to 575,000 items, and climb to greater than 700,000 by 2025. With the newest advances in generative synthetic intelligence, robots might quickly be used extra extensively in new eventualities corresponding to working along with people or in service roles, the Morgan Stanley analysts mentioned. “We desire Inovance and Geekplus ,” they mentioned. Whereas Shenzhen-listed Inovance is a extensively adopted provider of commercial automation merchandise, Geekplus has largely flown below the radar and solely listed in Hong Kong this summer season. Geekplus sells automated robotic methods primarily for transferring merchandise round warehouses. Greater than 70% of the corporate’s income got here from outdoors mainland China in 2024 , whereas Geekplus claims its prospects embrace greater than 65 Forbes International 500 firms . Analysts at Daiwa Capital Markets revealed these purchasers embrace Unilever, Walmart and Adidas, in response to an Oct. 3 report that initiated protection of Geekplus with a purchase score. The 4 firms didn’t instantly reply to a request for remark. The Daiwa analysts anticipate Geekplus to succeed in profitability this yr, and profit from trade development of greater than 30% a yr by way of 2029. The Chinese language firm can also be “well-prepared for U.S. tariffs,” the report mentioned. It famous that though a few quarter of Geekplus’ income comes from the U.S., the corporate costs 30% lower than opponents, which provides it room to boost costs, whereas it might shift meeting to Japan. Morgan Stanley’s favorability on Geekplus is predicated on a comparability to the humanoid and autonomous driving sectors, with a caveat that execution uncertainty stays along with a smaller potential warehouse market. However the analysts anticipate Geekplus may gain advantage from the chance to realize market share quicker than the general trade’s development. As for Inovance, the Morgan Stanley analysts mentioned that if the economic system grows quicker than anticipated, that might increase demand for automation merchandise. The analysts are significantly waiting for whether or not Inovance’s EV management methods will see better-than-expected gross sales this yr, supporting the inventory. HSBC analysts in mid-September upgraded Inovance to purchase from maintain “given its market management in manufacturing unit automation.” “We anticipate China’s industrial automation market to renew development in 2026-27, after two years of downturn,” HSBC mentioned. In consequence, they anticipate Inovance can develop its earnings by 22% a yr by way of 2027. —CNBC’s Michael Bloom contributed to this report.
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